The top economist at Goldman Sachs concluded in her latest analysis that the United Sates economy “grew much faster than expected” in 2024. The report came on the heels of Commerce Department data that showed the economy growing at an annualized rate of 3.1% over the summer, exceeding expectations, and up slightly from the 3% growth in the spring.
The New York Times recently reported that Scott Bessent, Donald Trump’s choice to lead the Treasury Department, has a goal of getting GDP growth to 3%. The latest evidence suggests that the country has effectively already reached the goal.
With this in mind, it was tough to blame President Joe Biden for taking a bow of sorts in a published piece for The American Prospect. “It is worth reviewing the facts on the U.S. economy that I am handing off to my successor,” the retiring Democrat wrote. “Unemployment has been at the lowest average rate of any administration in 50 years. We have created over 16 million new jobs, and more than 1.5 million of those are in manufacturing and construction. Inflation has been brought down close to 2 percent, the same level as right before the pandemic.
“Incomes are up by nearly $4,000 adjusted for inflation, and unions have won wage increases from 25 percent to 60 percent in industries like autos, ports, aerospace, and trucking. We’ve seen 20 million applications to start small businesses. Our economy has grown 3 percent per year on average the last four years — faster than any other advanced economy. Domestic energy production is at a record high, and gas prices are around $3 per gallon.”
The piece for The American Prospect coincided with a New York Times piece, also published last week, with a memorable headline: “The Economy Is Finally Stable. Is That About to Change?”
After five years of uncertainty and turmoil, the U.S. economy is ending 2024 in arguably its most stable condition since the start of the coronavirus pandemic. Inflation has cooled. Unemployment is low. The Federal Reserve is cutting interest rates. The recession that many forecasters once warned was inevitable hasn’t materialized. Yet the economic outlook for 2025 is as murky as ever, for one major reason: President-elect Donald J. Trump.
As regular readers know, there’s been no shortage of headlines in recent weeks and months about the strength of the domestic economy. A recent Wall Street Journal analysis described the state of the U.S. economy as “remarkable,” which coincided with a Bloomberg analysis that said, “The nation is experiencing a dream combination of strong growth and low inflation.”
There was more where that came from. A couple of months ago, the New York Times reported that the U.S. job market “is as healthy as it has ever been” — as in, in the history of the United States — and described recent economic growth as “robust.” A few days later, The Washington Post’s Heather Long explained in a column, “We are living through one of the best economic years of many people’s lifetimes.” The same day, Politico described the status quo as “a dream economy.”
The Economist, a leading British publication, also recently described the U.S. economy as “the envy of the world,” adding that the American economy “has left other rich countries in the dust.”
It reached the point that in the days leading up to Election Day, Trump actually started telling the electorate that he wanted credit for all the good economic news, despite the fact that he hasn’t been in office for nearly four years.
Soon after, just enough voters agreed to pursue a dramatic change of course. In fact, the aforementioned Times analysis from last week added, “On the campaign trail and in the weeks since his election, Mr. Trump has proposed sweeping policy changes that could have profound — and complicated — implications for the economy.”
Stepping back, it’s worth appreciating the recent pattern of events: In 2017, Trump inherited a healthy economy from a Democratic president and falsely told the public, “I inherited a mess.” In 2021, Trump bequeathed an actual mess for his Democratic successor and falsely told the public the conditions were “perfect.”
And with 2025 about to get underway, the pattern is holding: The president-elect is poised to inherit a healthy economy once more. I don’t seriously expect the Republican to thank Biden, but it’s worth keeping the facts in mind when Trump starts complaining in the new year about what he inherited.
